Organic rice chain in Boyolali district, Java, Indonesia

BASELINE STUDY 2008 Organic Rice Boyolali District (Central Java) 1. Sustainable Livelihood Analysis 2. Chain analysis 3. Baseline study average income

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Table of contents

1. Sustainable Livelihood Analysis ................................................................................ 3 1.1

Introduction ........................................................................................................ 8

1.1.1 Background ........................................................................................................................ 8 1.1.2 Approach: Creating the baseline ....................................................................................... 8 1.1.3 Report structure ................................................................................................................. 9

1.2

The Livelihood Framework of Organic Rice Farmers in Boyolali District ......... 10

1.2.1 Boyolali District ............................................................................................................... 10 1.2.2 Vulnerability context ....................................................................................................... 12 1.2.3 Livelihood assets ............................................................................................................. 15 1.2.4 Policy, Institutional Context and Process ....................................................................... 20 1.2.5 Existing Livelihood Strategies ......................................................................................... 25 4.1.1 Current Livelihood Outcomes ........................................................................................... 27

1.3

Conclusion ......................................................................................................... 27

1.4

Lesson learned from the process ...................................................................... 28

2. Chain Analysis .......................................................................................................... 29 2.1

Chain Map Chain logic & Power relations ............................................................. 30

2.2

Enabling environment ............................................................................................ 31

2.3

Business Development Services ............................................................................ 32

2.4

Bottlenecks barriers & leverages ......................................................................... 32

2.5

Production related issues ...................................................................................... 33

3. Results baseline study average income ................................................................... 35 3.1

Source data ....................................................................................................... 36

3.2

Results baseline average income...................................................................... 36

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1. Sustainable Livelihood Analysis Organic Rice in Boyolali District (Central Java) Solo, 2-5 December 2008 By Sebastian Eliyas Saragih – Independent Consultant CIRCLE Indonesia Ambarwati– VECO

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Executive Summary This report is a sustainable livelihood framework report for organic rice farmers in Boyolali.

This framework was produced by organic coffee farmers in Boyolali with facilitators from VECO and LSKBB, and an independent consultant from Circle Indonesia.

Trends affecting the lives of organic rice farmers in Boyolali are: diminishing soil fertility, unfavourable growth in the price of un-hulled rice, the rise in the cost of living, and the cost of education and social activities, decrease in land ownership, and the shrinking workforce. Positive trends are the upward trends in the price of organic rice, growth in the availability of organic fertiliser, and more freedom to practice organic farming. Important shocks include drought, rat infestations, avian influenza and increases in the price of refined fuel oil. Important seasonal events affecting the lives of farmers are the off-season, social events, and the second growing season.

These changes have affected people to different degrees, and there are people categorised as very poor, poor, middle class and rich. In general, organic rice farmers in Boyolali are in the middle social and economic class. Important human assets are the farmers’ awareness of the importance of education, and the presence of institutions providing extension.

Important natural assets are water sources and sufficient sunshine for organic farming.

Social assets are effective farmer groups and sub-neighbourhood associations. Important financial assets besides income from organic rice farming are savings in the form of livestock and bank savings accounts. Important physical assets are good irrigation networks and the availability of agriculture tools and machinery.

Important public policies affecting the organic farmers’ development of livelihood systems include integrated pest management field schools, bridging loans, government purchase price for unhulled rice, subsidised agriculture production inputs, and water privatisation.

The latter is particularly important to farmers who live in dry areas of Boyolali. Farmers’ participation in these policy making processes is limited to their being the target of these policies. While involved in development planning forums at the sub-village and village levels, farmers are not involved in processes at subsequent levels, except as the beneficiaries of these programs. In planning processes in the villages, women’s participation is very limited, because those invited to the meetings are the men who are regarded as the household heads. The women are typically represented by women’s groups such as the family welfare movement. And those women who do attend are usually very influential.

The main activities carried out by organic rice farmers to achieve livelihood outcomes are rice/secondary crop farming, livestock rearing, farm labouring, trading, taking part in social activities, capacity building, religious activities, and political activities.

Organic rice farmers are generally neither satisfied nor dissatisfied or satisfied with the health outcomes of their livelihood strategies. Some farmers feel dissatisfied with their food and housing, and others feel dissatisfied or very dissatisfied with their level of income, and their level of education. Most are satisfied with their social outcomes.

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Making this baseline facilitated the organic rice farmers to look in more detail at the factors that affect their lives, their strengths, and their livelihood outcomes. This was an interesting process, because the farmers themselves have a saying illustrating that life is a dynamic process, which translates literally as “life is like the wheels of a cart; sometimes up and sometimes down�. In other words, life has its ups and downs. This philosophy teaches that it is important to be aware that there are times when life is hard, but people will bounce back as long as they do not want to drown and die. The process of making this baseline reminded the participants about the importance of consciously managing their lives, of managing the threats and strengths, to keep them on the path towards a better, more sustainable way of life.

This livelihood framework mapping was a learning process for the farmers, those supporting the farmers, and the facilitators. The process also generated facilitation guidelines and facilitators from VECO partners and VECO itself who will be able to facilitate similar workshops in the future. The results of this baseline will inform VECo and its partners to strategise for future programme interventions.

The success of this mapping process depended largely on the openness of the farmers and their understanding of their own livelihood system. Unfortunately, farmers were unable to map structural problems, such as policy, as understanding of these is very limited at the village level. Even those that do have an understanding of structural problems at the subdistrict level are not entirely confident in their understanding. So, to get accurate information and provide additional information for farmers, prior to the workshop, interviews were held with key informants and key stakeholders.

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List of abbreviations and acronyms APBD BBM BPD BRI BULOG DFID GAPOKTAN HPP IMF INPRES KRKP LPM LPMD LSK BB LUEP MCK Musrembang PDAM PEMDA PHT PKK POSYANDU PUSKESMAS PUSTU RKA SKPD RKPD RT RW SLTA SP-36 TOR

Anggaran Pendapatan dan Belanja Daerah Bahan Bakar Minyak Badan Perwakilan Desa Bank Rakyat Indonesia Badan Urusan Logistik Department for International Development Gabungan Kelompok Tani Harga Pembelian Pemerintah International Monetary Fund Instruksi Presiden Koalisi Rakyat Untuk Kedaulatan Pangan Lembaga Perwakilan Masyarakat Lumbung Pangan Masyarakat Desa Lembaga Studi Kemasyarakatan dan Bina Bakat Lembaga Usaha Ekonomi Pedesaan Mandi Cuci Kakus Musyawarah Perencanaan Pembangunan Perusahaan Daerah Air Minum Pemerintah Daerah Pengendalian Hama Terpadu Program Kesejahteraan Keluarga Pos Pelayanan Terpadu Pusat Kesehatan Masyarakat Pusat Kesehatan Pembantu Rencana Kerja dan Anggaran Satuan Kerja Pemerintah Daerah Rencana Kerja Pemerintah Daerah Rukun Tetangga Rukun Warga Sekolah Lanjutan Tingkat Atas Sodium Phospat-36 Terms of Reference

Acknowledgements The report team would especially like to express their thanks to the coffee farmers in Toraja and organic rice farmers in Boyolali for volunteering their time and energy, and sharing their knowledge and understanding of their livelihood systems to the report team. Without their help, this report could never have been produced.

We are also grateful to all the staff and management of Yayasan Lembaga Studi Kemasyarakatan Bina Bakat Boyolali, particularly Mr. Suswadi, Mr. Endro for helping the report team when facilitating the workshops, Ms. Okta, Ms. Berti, and all staff that assisted the workshop on December 2 – 5, 2008.

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We would also like to thank VECO Indonesia for entrusting us with facilitating and writing this report. In particular, we thank Mr. Steff Deprez, Ms. Wati, and Ms. Anna for their support throughout the workshop process and the writing of this report.

Finally, we hope that this baseline report will be of use in designing the programs and monitoring and evaluating the activities carried out by VECO Indonesia together with its partners.

Denpasar-Yogyakarta, 15 December 2008 1. Mr. Sabastian Eliyas Saragih – Independent Consultant Circle Indonesia 2. Ms. Ambarwati – Staff VECO Indonesia

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1.1 Introduction

1.1.1

Background

In preparation of its work program for 2008 – 2013, VECO Indonesia created a baseline. This baseline combined qualitative data collected through interviews and questionnaires, and qualitative data gathered at two workshops attended by a sample group of producers of organic rice farmers from Boyolali, Central Java. The framework used to present the qualitative/descriptive data collected from the producer group is a sustainable livelihood framework based on the Department for International Development (DFID) sustainable livelihood framework.

This report is a baseline of qualitative/descriptive data mapped using a sustainable livelihood framework. This report contains the baseline for a Sustainable Livelihood Framework for Organic Rice Farmers in Boyolali.

1.1.2

Approach: Creating the baseline

The steps involved in making this baseline were: Developing facilitation guidelines and baseline guidelines Simulated guidance with prospective facilitators comprising the VECO staff and VECO partner staff that organised the producer groups, under the guidance of an independent consultant.

Livelihood framework mapping workshops with male and female participants from VECO partner target groups, and others. Of the 30 people attending each workshop, give were not from VECO partner support groups.

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Workshop process Introduction to the sustainable livelihood framework adapted to local terms.

- For sustainable livelihood framework, the term of sustainable development wheels - was used. For vulnerability context, the term used was outside the natural factor that makes life become more difficult These non-natural factors were divided into trends, shocks, and seasonality.

- For policy, institution, and process, the term used was policy out side factor - For livelihood strategy, the terms work or activities to sustain life or to achieve the goals of life were used.

- For livelihood outcomes, the terms goals of live or what that wants be achieved in each activities/work have been done were used.

- Because the diverse opinions of the participants produced very broad pictures, prioritising or ranking was carried out at each session to identify the most important elements of those mapped.

- In Boyolali, when the sustainable livelihood framework for organic rice farmers had been mapped, the framework was presented to the Boyolali district agriculture, plantations and forestry service and member of the Boyolali district house of representatives. Clarification was provided on several points and input was given on the policy, institutions and process component.

1.1.3

Report structure

This baseline report encompasses:

An overview of the area where the producers live, the history of their involvement in producing the key commodities they now produce (organic rice), and the history of the involvement of VECO and its partners in this sector.

The baseline in the form of a diagram Vulnerability context o Trends o Shocks o Seasonality Assets mapping o Human assets o Natural assets o Financial assets o Social assets o Physical assets Structure & process o Institutions o Policy o Process Livelihood strategies Livelihood outcomes Conclusions Lessons learned from the creation of the baseline 9

1.2 The Livelihood Framework of Organic Rice Farmers in Boyolali District

1.2.1

Boyolali District

Boyolali District, one of 35 districts/municipalities in the province of central java, is situated between 110º 22' – 110º 50’ E and 7º 36’ – 7º 71’ S. At an elevation of 75 m – 1,500 m above sea level, the districts extends 48 km west o east and 54km north to south.

Administratively, Boyolali District consists of 19 sub district, which are divided into 262 villages and 5 wards. Of these villages and wards, 224 or around 83 percent are in low-lying areas, and the remainder are in upland areas.

Boyolali District covers an area of 101,510.1 ha, consisting of 22,119 ha (21.79%) paddy fields and 79,371.1 ha of other land. In terms of land use, paddy fields irrigated using technical methods cover the largest percentage (23.98%), with remainder irrigated using semi-technical and simple methods, or are rain fed or irrigated in other ways. A total of 25,023.2 ha (31.52%) of dry land is used for buildings/yards, 30,608.9 ha (38.55%) for dry fields/gardens/dry rice fields, 14,454.7 ha (18.21%) for state-owned forest, and the remaining 11.27% for grazing, aquaculture and other uses.

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Boyolali produces 207,312 tons of rice a year on 37,194 ha of land in Nogosari, Andong, Karanggede, Banyudono, and Ngemplak sub district.

There are 947,026 farmers in Boyolali District. Of these, 48,279, or around 5%, have kdeveloped organic or semi-organic rice farming. In addition, many other farmers grow rice using conventional methods or cultivate non-rice commodities, such as vegetables, horticultural crops, and so on.

The principle of agricultural development promoted by VECO Indonesia is LEISA (low external input for sustainable agriculture) in which the use of synthetic chemical inputs is kept to a minimum. In the course of time, local resources available in Boyolali, such as livestock rearing potential, water sources, and availability of plants to make organic pesticides, allowed the program to move towards development of organic farming. This also had to do with the farmers’ growing awareness of the impacts of excessive use of chemical inputs and its eventual destruction of the soil structure, thinning of topsoil, and diminishing of soil fertility, that meant more and more fertiliser had to be applied, while the price of fertiliser soared, and pests and diseases became more resistant with the loss of their natural predators and other imbalances in the ecosystem. Other equally important contributing factors were the market opportunities for organic farm products and health issues.

The decision to focus activities more on developing the organic rice chain came in 2006, when LSKBB and VECO Indonesia learned more about how to run sustainable agriculture chain development (SACD) programs. What they learned was the commodities should be developed not from the perspective of what the producers can develop, but rather from the perspective of what the potential market is of the commodities, thus making a more effective contribution to improving the position of farmers in the chain being developed. Through a series of analysis and mapping processes, organic rice was identified as the best commodity for VECO Indonesia and LSKBB to develop in Boyolali District.

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1.2.2

Vulnerability context

Important Trends In the last 10 – 15 years, the livelihood system of rice farmers has been made more vulnerable by various trends. These trends are:

Diminishing soil fertility. In response, farmers tend to apply more fertiliser. According to a report published by Koalisi Rakyat untuk Kedaulatan Pangan (People Coalition for Food Sovereignty)1, intensive use of paddy and excessive use of fertilisers over several decades has reduced the fertility of the soil. The intensity of the use of fertilisers increased in an attempt to maintain productivity. At that time, the use of fertiliser in paddy rice production was far above its optimal point. Application of urea was 270 kg/ha or 50% above the optimal dose of 189 kg/ha, and application of SP-36 was 103 kg/ha, more than twice the optimal dose of 48 kg/ha.

Excessive use of fertiliser not only damages the soil, it also increases production costs, reducing production and profits. The price of un-hulled rice is becoming less profitable.

Although its nominal value is increasing, this increase is insignificant compared with its power to purchase production inputs. Furthermore, farmers are spending more as the cost of living, the cost of education, and social costs increase.

Although rice productivity in Indonesia is relatively high, at 4.69 ton/ha (2007), and on an upward trend, farmers are worse off. The revenue-cost values for agriculture for 2004-2007 show that farmers’ incomes, in real terms, have shed around 4-5%.

Presidential Instruction 1/2008 on government purchase prices sets the price of unhulled rice at Rp 2,200/kg, up 10%. The price of milled, dried unpolished rice in logistics agency (Bulog) warehouses was raised 9.23% to Rp 2,840 and the price of polished rice in Bulog warehouses was increased 7.5% to Rp 4,300/kg. But these increases in government purchase prices are way below the increases in the cost of producing rice and the living costs of farmers, which in the last year have risen around 25% (Bisnis Indonesia, 2008).

Quoted from the KRKP website at http://krkp.org/content/view/49/41/

In addition, over the past 15 years there has been a decrease in average land ownership.

This is the result of a growing population and the increasing amount of farmland that has been turned over to housing, industry and roads.

Data on village potentials from 1999-2002 indicate an annual loss of 35,827 ha of paddy field in Java, and 141,286 ha outside Java. The 1983-2002 agriculture census notes that for the whole of Indonesia the rate of conversion of paddy field is 34,700 ha/year. Although the figures vary, all official data consistently show an absolute decrease in the area of paddy field. Meanwhile, in the past 10 years, the number of farming households has risen from 20.8 million to 25.6 million. According to the 2007 national land cencus, average land ownership in Java is 0.451 ha per farmer, and outside Java is 0.388 ha per farmer.

From the KRKP website at: http://krkp org/content/view/49/41/

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Quoted from the KRKP website at http://krkp.org/content/view/49/41/

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Another trend is that young people are becoming less interested in working in the agriculture sector, especially those who are educated to a reasonably high level.

Lastly, a macro-economic trend is the change in function of land use from productive agricultural land into settlements and industry.

Besides the trends that have made life more vulnerable, there have been some positive trends in the past 10 – 15 years that could be opportunities for the local communities to turn around their livelihood systems. These opportunities include:

The upward trend in the price of organic rice. Demand for organic farm produce is growing. But the farmers’ capacity to produce organic products is limited, which means supply is limited and the price of organic rice is rising.

Increasing consumer demand for organic agricultural products coupled with a growing interest in organic farming among farmers. But the farmers have not been able to provide all the tools of organic production themselves. This has given rise to the growth of organic fertiliser producers, making compost easy to obtain as increasing numbers of farmer produce ready-to-use organic fertiliser.

This rapid growth in organic agriculture also has to do with government policy allowing farmers to choose the farming method that they feel is best for themselves and their environment. This was unheard of during the Soeharto regime, when farmers, especially those farming irrigated land, had to farm using methods and technology packages promoted by the government.

Important shocks and their impact on the coffee farmers According to the organic rice farmers in Boyolali, drought is the most important, and most frequent, shock for farmers. Another common disaster is rat infestations. A recent avian influenza scare was also very worrying for rice farmers in Boyolali. But according to the Boyolali District Agriculture, Forestry and Plantations Service, the government has taken measures to manage these shocks, including: - Building reserve wells in drought-prone areas, repairing irrigations ditches, and improving management of irrigation water.

- Educating farmers about controlling rats, for example by ensuring that their farmland is kept clean. The government has also prepared a mass rat eradication program to be put in place in the event of a rat infestation in a particular area.

- Providing intensive extension to enable people to identify avian flu and know how to prevent its spread. The government has also formed avian flu control task forces at the subdistrict level.

Besides shocks directly related to farming activities, the farmers were also affected by the adverse impacts of the rise in the price of refined fuel oil. As a result of these price increases, the price of everything has gone up, which has been an enormous burden to the farmers.

In the course of history, earthquakes and volcanic eruptions are shocks that have disrupted the lives of Boyolali farmers. But earthquakes and volcanic eruptions are less common, and their impacts less serious, than those of drought, rat infestations, and avian influenza.

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The negative impact of drought affecting organic farmers in Boyolali District is harvest failure as a result of water shortages. For farmers that depend so much on their harvests, a failed harvest means no income until the next harvest, which means they have difficultly meeting their day-to-day needs, setting aside working capital for the next growing season, etc.

Losses also arise from rat infestation, because generally the rats do not stop until all the crops have been completely destroyed. Having three, continuous growing seasons increases the likelihood of perpetual rat infestations, because they have a supply of food all year round.

The increases in the price of refined fuel oil are another shock that has affected the lives of farmers, as the cost of living, such as the cost of transport and basic necessities, has risen. At the same time there has been no increase in the price the farmers receive for their un hulled rice, so the exchange value of farmers' products automatically goes down. Income from harvests that used to be sufficient to meet their life needs, is now far from adequate.

Important events in the seasonal calendar As well as trends and shocks, seasonal conditions also affect the livelihood system of rice farmers in Boyolali. Farmers feel that the worst season for them is the off season (April to June) when food stocks and farmers' incomes are at critical level prior to the harvest. At these times, farmers have to spend more than usual, which means they have to dig into their savings or take loans.

Seasonal Calendar organic rice Boyolali

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Other important events in the seasonal calendar during which farmers have many expenses are festivals, social or religious activities, and the start of the school year. This kind of expenditure is generally high in June, July and August, and particularly at Idul Fitri (the yearly Ramadan period).

But overall, farmers report that there have been changes in these seasons. Over the past five years, the seasons have become less predictable, making it more difficult for farmers to manage their livelihood system. The wet season usually starts in September, with a little rain in August. By the end of August, the rain has arrived and the farmers start sowing. But in recent years, the rains have lasted only a few days, followed by a month of no rain, and the seeds they have sown die, and the farmers have to re-sow their fields. They feel that the seasons are becoming less predictable.

The prices of basic food products such as vegetables, cooking oil, flour and sugar are fluctuating throughout the year. In times of harvesting (over-production) prices go down while at times of low harvest due to a disaster (pest, flood, wind, drought, etc.), the prices will increase. However, especially for the price of rice, the price difference between seasons (harvest season, and off-season famine) is relatively stable due to the interventions of the government to stabilize the price. Rice is the number one food commodity and the government is cautious to stabilize the rice price to maintain the political stability.

1.2.3

Livelihood assets

In general, farmers in Boyolali divided their society in four welfare categories: rich (estimated at around 8.4% of the rural population), middle (estimated at around 41.6% of the rural population), poor (estimated at around 41.6% of the rural population), and very poor (estimated at around 8.4% of the rural population). Most organic farmers put themselves into the middle category. Key criteria used by farmers for these welfare categories are as follows:

Rich More than 1 ha of land

Poor Less than 1,000 m2 of land No regular work (seasonal worker)

Very poor Landless

Higher education and entrepreneur

Middle 3,000m2 – 1 ha of land Earns a decent income

Income > Rp 2 million/month

Earns > Rp 1 million/month

Earns < Rp 500,000/month

No regular income

Comfortable house with all fittings

Standard house, with cement floor, bathroom & toilet 450-900W electricity Has a motorbike

Bamboo house, dirt floor

Very simple housing (bamboo, dirt floor), usually built on someone else's land No electricity

More than 900 W of electricity Has car and motorbike

No electricity, or only for lighting Has a bicycle

Old, sick, no regular work

No transport

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Eats 4 basics (carbs, protein, fruit and veg) plus milk Educates children to at least university level Happy to help out Savings in cash and kind

Eats 4 basics (carbs, protein, fruit and veg), nutritious food Educates children to senior secondary level Able enough to help out Has limited amount of livestock and savings

Eats fairly simple food

Eats whatever is available (not nutritious, not regular)

Children educated to a low level

Cannot afford to send children to school Has no collateral to secure loans

No savings, and uses loans to cover day to day expenses Raises livestock with others on a profitshare basis

Human Assets The most important human assets that Boyolali organic farmers have is their awareness of the importance of learning and building knowledge. Routine training for farmers organised by extension agencies, such as government agriculture extension workers and LSK, help raise farmersâ&#x20AC;&#x2122; awareness on rice farming. Also organic fertiliser traders frequently organise organic farming training, focusing on the use of their products and the benefits of the products to the crops and the soil.

Another human asset is the experts living in the Boyolali area, who can be called to give their expert opinion when needed. There are also formal agriculture education institutes (up to the tertiary level in Boyolali).

Public health service facilities, which include auxiliary primary health centres, primary health centres, village midwives, etc., function well. In average, the rice production in the Boyolali District has a yearly surplus of 500 ton.

The food sufficiency of farmers in Boyolali is quite good. Since two years, the government has developed a rice storage mechanisms (Lumbung) which matches well with LSKBBâ&#x20AC;&#x2122;s programme on improving the position of rice farmers. The paddy region in the Boyolali District is mainly situated in the wet land area. The dry land are has a limited rice production and the forest area is a rice consumer area.

Food security in the Boyolali District is assured by two measures. First, farmers can only sell their rice after all rice for daily consumption and social activities is finished. Rice is stored at household level or at farmer group level. Second, if there is a surplus of rice, it will first be used within the Boyolali District before it is sold to other areas.

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RICE PRODUCTION AREA

LIMITED PRODUCTION AREA

RICE CONSUMER AREA

Rice production and consumer areas in Boyolali

Nowadays, the younger generation has less interest in the farming business. They prefer to work in the city as labor forces, traders, teachers, ... Cities such as Boyolali, Solo or Semarang are relatively close from any area in the district and roads/transportation is a good. However, during the harvest time, many young labor forces return back to their â&#x20AC;&#x2DC;home areaâ&#x20AC;&#x2122; to help their family or neighbors to work on the field.

Natural Assets The most important natural asset of organic farmers in Boyolali is water. The source of water for irrigation comes from the irrigation channels, river water, artisan wells or ground water. So far, the use of irrigation water is set by the group. Each area has a specific irrigation schedule.

Another important asset is the availability of land,. Most farmers own the land but some farmers lease land as tenants from other people. including dry land, paddy and gardens, owned by the farmers themselves, rented, or farmed on a profit-share basis. The average farmer has a land size of 0.3 ha. Farmers grow a balanced variety of crops, including food crops and grass for livestock feed. Most common crops are:corn, beans, cassava, vegetables (chilli, tomato), coconut, fruits (rambutan, mango, banana), ginger, â&#x20AC;ŚThere is a diversity of fauna on the farmers' land too, including livestock as investments and to assist with the production process, as well as fauna that function as natural predators, protecting the farmers' crops from pests and diseases.

Generally farmers in Boyolali keep livestock such as goats, cows and buffalo. Livestock is mainly seen as a savings that will be sold at any time if money is required. Livestock can be owned by the farmer while poor farmers take care of livestock owned by people. In the latter case, the profits are shared (40:60 or 30:70).

The manure of the livestock is used as natural fertilizer which reduces the cost of purchase of additional fertilizers and also helps to restore the soil fertility and is more environmentally friendly.

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Social Assets An important social asset of organic rice farmers in Boyolali are the farmer groups which are of enormous benefit to the farmers, particularly in sourcing inexpensive fertilisers and providing a place where farmers can discuss and share knowledge about organic farming.

Although Boyolali farmers have started to shift towards organic farming, they still use nonorganic fertiliser to maintain productivity levels.

Another important social asset is the ties that have been developed in sub-neighbourhoods (rukun tetangga â&#x20AC;&#x201C; RT). These institutions function not only as an extension of government, particularly in terms of providing information issued by government, but also for collecting funds for social activities and providing the labour and tools needed for festivals and funerals. Other social groups in the villages are women's micro-enterprise groups and village rice stores (lumbung pangan masyarakat desa â&#x20AC;&#x201C; LPMD). The former work to improve the skills of women and to collect social funds for women's events. The latter accumulates a store of food for the community and provides information and organic rice products.

Organic farmers also feel that village health post (posyandu) meetings contribute to their social assets because they promote cooperation and mutual self-help in health development among parents with children under five and elderly people.

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Financial Assets

In general, the income derived from organic rice is only 35% of the annual income. 29% comes from other agricultural products (beans, cassava, fruits, livestock, â&#x20AC;Ś ) and 36% from non-agriculture activities: renting tractor, teachers, civil servants, construction workers, â&#x20AC;Ś Farmers only sell 70-75 % of the rice produced.

The interviews with a sample group of 26 organic rice farmers indicates that the average annual family gross income derived from organic rice is Rp. 78 million (in wetland area, max. rendement (ton/ha) and if 100% of the rice produced is sold) while the average annual expenditure for organic rice farming is Rp.15.000.000 (in wetland area).

Most organic farmers in Boyolali have savings in livestock and cash. Discussions indicated that their average annual savings in cash range between IDR 1 million and IDR 3 million.

Another important financial asset for organic rice farmers in Boyolali is Bank Rakyat Indonesia, from where they can obtain loans and deposit savings. Farmers also have access to money managed by village financial institutions, such as the community economic development agency (LPEM) and the village rice store. In several villages there are Bank Perkreditan Raykat (BPR) and credit unions. If forced to, farmers can also borrow money from money lenders on easy terms but at high rates of interest. Ofcourse thisis for farmers who have a rather stable income. Poor farmers donâ&#x20AC;&#x2122;t have possibilities for loans.

Women take a role in the selling process of the organic rice as well as the purchase of the daily household expenditure. Investments and decision on input production costs is usually done by the men.

Physical Assets Important physical assets for farmers are the good irrigation networks and the availability of agricultural tools and machinery, such as hand tractors, mulchers, rice mills and so forth.

Other important physical assets that help farmers develop their livelihood resources are a good power supply, good business environment, good transport and good communication systems with other farmers.

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The road infrastructure is well developed in the Boyolali District and each area can at least be reached by motorbike. The road infrastructure is adequate to carry the harvest of rice from the land to the home and to the respective market, and vice versa.

The most common form of communication is the face to face meetings during farmer group meetings or discussions in the field. Most farmers have a cell phone and a community radio managed by JTM (Jaringan Tani Mandiri), a local farmer organization, is an important communication tool.

Electricity is available in almost all the areas of the Boyolali District. No electricity is required for the production of organic rice and sufficient electricity is available for the milling, packaging and labeling process.

1.2.4

Policy, Institutional Context and Process

There are five important policies affecting the livelihood systems of organic rice farmers in Boyolali: 1. Integrated pest management field schools 2. Bridging loans 3. Floor price for Un-hulled rice/government purchase price 4. Production input assistance 5. Water privatisation

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Integrated Pest Management (IPM) Field Schools IMP field schools have been run by the government since 1989, pursuant to Presidential Instruction 3/1986 which requires that pest control should be integrated. Implementation of IPM is the joint responsibility of farmers and government. Farmers provide on-site learning support for farmers for one growing season. This particular method for farmer training, i.e. farmer field schools, have not only been developed for rice, but also for all key commodities.

Bridging Loans The Bridging loan policy is a Ministry of Agriculture program established by a Decree of the Minister of Agriculture 49/Kpts/OT.140/3/2004 concerning general guidelines for funds to strengthen economic enterprises in rural areas by controlling rice prices at the farmer level.

This program provides bridging loans to rural economic enterprises to purchase rice from farmers at the government purchase price during harvest time. In its implementation, the regional government was asked to allocate additional funds from the regional budget, in order to augment the bridging loan funds available to farmers. The Boyolali District government provides bridging loans to farmer groups/associations which are recognised by the district government and legalised by a decree of the district head. Bridging loans given to these farmer groups/associations must be used to purchase rice at the minimum government purchase price at harvest time, when prices normally dip sharply and farmers are manipulated by middle-men. These bridging loans take the form of village loans from district government that must be repaid, although they are interest and discount free.

According to reports on the offical Boyolali District government website, bridging funds or LUEP funds in 2007 amounted to more than IDR 3 billion and were used by 27 LUEP members, allowing them to purchase 0.61% of totatl rice production. In 2008, LUEP funds of IDR 2 billion from Jawa Tengah Province were distributed to 45 LUEP. Regional government expects that these funds will be sufficient to purchase 0.37% of total rice production in Boyolali in 2008. Given that LUEP funds are budget from the province through the provinical budget, they must be repaid to the provincial treasury. LUEP funds disbursee in early 2008 must be repaid by 15 December 2008.

The most influential and most important institutions are the Ministry of Agriculture, the district agriculture, forestry and plantations agency, traders and middlemen. The least important but influential institutions are the regional government, regional houses of representatives and agriculture extension workers. Institutions of importance but with little influence are the farmer groups/associations.

Floor Price for Unhulled Rice/Government Purchase Price The price policy is issued via Presidential Instruction concerning rice policy, as amended by Presidential Instruction 3/2007. Through this policy, the government sets the standard price for un-hulled rice and the government purchase price. This policy also regulates where purchases of un-hulled rice and government purchases of rice take place. At the national level, purchases are made by the national logistics agency, BULOG. But at the village and district level, purchases of un-hulled/polished rice may be made by regional government or businesses operating in the rice sector.

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The most important and influential institutions are the Ministry of Agriculture, the district agriculture, forestry and plantations agency, the national logistics agency, traders and middlemen. Institutions of little importance but with much influence are regional governments, regional houses of representatives, and village governments. Institutions of importance but with little influence are the farmer group associations, and farmer groups.

Production Input Assistance The national government, through the Ministry of Agriculture, has also introduced a policy of subsidies for production inputs for farmers, which is disbursed via farmer groups/ associations. As with the bridging loans, these subsidies are normally distributed through the district budget mechanism, although during the budgeting process, the district government, based on input from the district agriculture agency, knows, from the Ministry of Agriculture via the district agriculture service, the amount of the budget allocation from the national budget.

Mechanism and procedure for distribution of subsided seed Target farmers are identfieid by the district agriculture agency. Farmer groups make applications for subsidised seed through their farmer group association, which are then submitted to the district agriculture agency, based on the definitive list of group needs (RDKK) compiled by the farmer group and approved by the local field extension worker/farmer mentor, or the seed supervisor/pest monitor. The district agriculture service summarises the requests for subsised seed from farmer groups and farmer group associations and the names of their members, based on the approved RDKK. The approved list is then sent to producers and distributors, and they prepare or distribute the seed as per the applications form the farmer gorups and farmer group associations. Farmer gourps and farmer group associations exchange vouchers for seed at designated distributors or kiosks.

The most important and influential institutions are the Ministry of Agriculture, the district agriculture, forestry and plantations agency, traders and middlemen. Institutions of little importance but with much influence are regional governments, regional houses of representatives, agriculture extension workers, regional development planning forums, and MUSPIKA. Institutions of importance but with little influence are the farmer group associations, and farmer groups.

Water Privatisation The water privatisation policy turns water management to the private sector. Since 1974, pursuant to Law 11/1974 and later to Law 7/2004 on water sources, the government has allowed private businesses to obtain water use rights. Water use rights can be granted to an individual or to a business entity with a business permit from national or district government.2.

In Jawa Tengah generally, conflicts over use of irrigation water between water irrigation users and water supply companies have invariably been won by water supply companies.

According to a WALHI position paper3, several water sources are under private control.

2

See http://www.pu.go.id/index.asp?link=Humas/news2003/ppw160605gt.htm

3

http://www.walhi.or.id/attachment/d016df19778a7c563cd1c99afe29c43a/74dc74b78a4d5647ed63a4a737e6af15 /Kertas%20Krisis%20Indonesia.pdf

22

Sigedang water source in Klaten, Jawa Tengah, for example, is controlled by Aqua, Muncul Rawapening water source in Ungaran is controlled by the district water utility and Java, and the Pudak Payung water source in Semarang is controlled by Ades. Many other water sources are managed by private companies.

The most important and influential institutions are regional government and water companies. Institutions of little importance but with much influence are regional houses of representatives, agriculture extension workers, and village governments. Institutions of importance but with little influence are the farmer group associations, and farmer groups.

The passing of the Law on water sources in replacement of existing water law was a preconditoin of the USD 500 million World Bank loan. This is a part of the water restructuring adjustment loan (WATSAL) promoted by the World Bank. Water restructuring basically means minimising the role of the state in water management. The justification for minimising the role of the state is to reduce subsidies and transfer the role of public services to the private sector. This is part of the agenda of total liberalisation promoted en-masse by international creditors, the IMF and the World Bank.

Under this law, the cost of managing water sources and irrigation networks is no longer be borne by government. Regional governments are asked to find ways of covering these costs themselves, or to attract investors. Restrucutring of water management completely changes public control over and access to water sources. In the future, private companies will charge for the use of irrigation networks.

See Thontowi Jauhari

http://thontowijauhari.blogspot.com/2007/12/privatisasi-air.html

Participation in the policy (development)and decision-making processes Farmer participation in the drafting of these five policies was limited to being the targets or beneficiaries of these policies. While priorities are ranked under the bridging loan program, groups are nominated for production input subsidies, and farmers are involved in the district budgeting process (development planning forums), their participation extends only to the planning at the village level.

In subsequent processes, from village development planning forums to budget decisions, farmers are not involved. In the budgeting process, while district government consider input from the district development planning forums, its main reference is nevertheless the national budget portfolio (national budget allocations to the district). In addition, it is a process of selection, given the large number of proposals made by the district development planning forum. For example, bridging loans: despite the proposals from the village development planning forums, the amount of funds allocated to each district is determined by the central government based on certain formulas. And district governments are expected to supplement these funds. According to the house of representative members attending the livelihood workshop, only 20% of the budget for the agriculture sector comes from the district budget and is managed by the regional government. The remaining 80%

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comes from the national budget and is managed by the central government. Boyolali District government actually borrows some bridging loan funds from Jawa Tengah provincial government.

Development Plannng Forum Process Participatory development planning forums, which exist all over Indonesia, at all levels (village, sub-district, district) are held annually. Held in parallel at the sub-district level are Regional Government Work Unit (SKPD) forums which discuss inputs from the development planning forums concerning sub-district activities within their scope of authority.

The development planning forum procedure involves three stages: pre forums, forums and post forums. Pre forums at the village level consist of teams collecting data, prosposing activities, and holding dicsussions at the neighbourhood (RW) level. These teams consist of representatives of the village government, LPM and BPD. The discussions, which involve 50 -60 people, identify problems and proposals. The actual development planning forum is attended by around 70 people, including representatives of RWs, village government, village council and other village stakeholders.

The procedure from beginning to end, when proposals become work programs with a budget, is as follows: Musrenbang Desa/Kelurahan Musrenbang Kecamatan Penyampaian dan Kompilai hasil Musrenbang Kecamatan Forum SKPD Musrenbang Tahunan Kab/Kota Penyusunan Rencanan Kerja Pemerintah Daerah/RKPD Penetapan RKPD Musrenbang Propinsi Musrenbang Nasional Penyusunan dan Penyampaian KUA APBD Penyampaian PPAS APBD Pembahasan dan Penetapan KUA Tahun PPAS â&#x20AC;&#x201C; APBD Surat Edaran KDH Tentang Pedoman Penyusunan RKA SKPD Penyusunan Rencana Kerja dan Anggaran (RKA) SKPD Penyusunan Draft Raperda APBD Penyampaian Nota Keuangan Publikasi APBD Public Hearing (Interaktif) Pembahasan Nota Keuangan & Rapedas APBD Draft Raper KDH tentang Penjabaran APBD Evaluasi raperda APBD dan raper KDH Penjabaran APBD dan Gubernur Penetapan Perda APBD & Peraturan KDH: Penjabaran APBD Penetapan DPA-SKPD

In development planning forum activities in the villages, each family is usually represented by one person, a male. Invitations to village meetings are typically addressed to the man considered to be the head of the household. Households without men are normally not represented at the meetings. In other words, women are usually not invited to village meetings, despite the fact that regulations governing the implementation of development planning forums recommend that at least 30% of those attending are women. But in reality, this is not the case. Some women do attend, mainly women representing women's groups such as the family welfare movement, posyandu, etc. And those attending village meetings are typically women who are very active and who play a role in decision making.

Relationship between organic rice producer groups and other social groups.

Organic rice producers are ordinary farmers. They are part of the rural community as an inclusive social group interacting with other members of the community, such as neighborhood groups, muslim religious groups, etcâ&#x20AC;Ś and are involved in all the social, religious, social and governance activities. What distinguishes them is the implementation of the principles of organic farming in the rice production process.

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1.2.5

Existing Livelihood Strategies

Livelihood strategies of the rice farmers in Boyolali are varied, and include productive, social, religious, political and capacity building activities. But the largest portion of their assets is used for productive activities, and the productive activities that absorb most of their assets are rice and secondary crop farming, livestock rearing, labouring and farm labouring, and trading. The pie chart below shows the composition of activities carried out by organic rice farmers in Boyolali.

5%

1% 1%

7%

Rice/secondary crop farming 35% Livestock rearing

7%

Farm labouring Trading Social events

6%

Parties/festivals Capacity building

6%

Religious activities Political activities

7%

Recreation 25%

In general, it can be concluded that women play more of a role than men in farming activities.

The matrix below shows the division of roles between men and women and the impact of activities on the environment. In general, organic farming activities have a positive impact on the environment, with the exception of marketing activities which generally have a negative impact on the environment because of the plastic used for packaging, the pollution produced by the use of refined fuel oil, and the use of non-renewable resources in processing the rice and brining the product to the consumer.

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Activity

Division of Roles Men

Raising seedlings Soil management Planting 1. pulling up seedlings 2. planting Maintenance 1. spreading organic fertiliser 2. weeding 3. watering 4. spreading organic pesticides Harvest 2. cutting 3. threshing 4. transporting Post harvest a. drying b. storing c. milling d. sorting e. packing Marketing

Impact on the environment + O -

Women

2 4

1 1

• •

4 1

1 5

• •

3

2

•

3 4 4

3 1 1

• • •

3 3 4

3 3 2

•

2 3 3 2 2 2

3 3 2 4 2 4

• • • •

• • • • • •

Organic rice farmers in Boyolali can be divided into dry-land farmers and wetland paddy farmers. Paddy farmers plant rice three times a year and can set aside around 70-75% of their harvest for family income and the other 25-30% for their own consumption. Dry land farmers are able to set aside only around 10% of their harvest for income, and the remaining 90% is for their own consumption. Average household rice consumption in Boyolali is 1 kg/day or around 135 kg household/year. The diagram below shows the food sufficiency and household incomes of paddy framers and dryland farmers.

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4.1.1

Current Livelihood Outcomes

Livelihood outcomes which are important to organic rice farmers in Boyolali are health, food sufficiency, income security, education and social outcomes. Outcomes are perceived as reasonable, with the exception of social outcomes, with which the farmer are satisfied.

Many farmers are dissatisfied or very dissatisfied with their education and income outcomes.

The farmers presented their perceptions of the five most important current livelihoods as follows: Ranking Livelihood outcome

1 2 3 4 5 1.3

Health Food and housing Income Education Social

Very dissatisf ied

13% 9% 4% -

Level of Satisfaction Dissatisf Neither Satisfie ied satisfie d d nor dissatisf ied 3% 61% 36% 58% 29% 26% 27%

52% 62% 46%

13% 8% 54%

Very satisfie d

-

Conclusion

This description of the existing livelihood system shows that the condition of Organice Rice farmers is not vulnerable. However, for some of their livelihood outcomes they feel neither satisfied nor dissatisfied. And the welfare categories indicate that almost half of the villagers are poor or very poor.

Organic farmers do not fall within the categories of poor or very poor. And that is an asset for building social transformation in villages, because it is generally the middle classes that drive social transformation, rather than the poor, very poor, or rich. There are many policies that affect the livelihoods of rice farmers. And in general farmers are only the targets of these policies. The only development planning forums which involve farmers are sub-village and village development planning forums, which are regular planning forums used by government. Women's participation in decision making in villages is very limited, because women are generally not invited to village meetings. However the women that do attend meetings have a very strong influence.

There are trends that undermine the livelihoods of farmers or drive them in an undesirable direction. But the strength of the social assets of organic rice farmers and their influence in support organisations in Boyolali should provide opportunities to influence policy making processes in Boyolali.

This baseline was helpful to the participants in mapping their strengths and threats, and their livelihood strategy outcomes. Decisions about how to deal with these threats and make use of existing strengths in order to achieve sustainable goals need to be negotiated between the organic rice farmers, LSKBB and VECO. 27

When an intervention program is agreed by the organic rice farmers, LSKBB and VECO, this baseline will be instrumental in the implementation this program because: - it was produced in a participatory way - it can be used to measure and monitor program progress, in the sense of to what extent the changes generated by the program contribute to changes in the organic rice farmers' sustainable livelihood framework.

Therefore, it is suggested that the results of this livelihood study should be distributed to the farmers and those supporting the farmers, and used as discussion material during monitoring and evaluation.

1.4

Lesson learned from the process

Making this baseline facilitated the organic rice farmers to look in more detail at the factors that affect their lives, their strengths, and their livelihood outcomes. This was an interesting process, because the farmers themselves have a saying illustrating that life is a dynamic process, which translates literally as â&#x20AC;&#x153;life is like the wheels of a cart; sometimes up and sometimes downâ&#x20AC;?. In other words, life has its ups and downs. This philosophy teaches that it is important to be aware that there are times when life is hard, but people will bounce back as long as they do not want to drown and die. The process of making this baseline reminded the participants about the importance of consciously managing their lives, of managing the threats and strengths, to keep them on the path towards a better, more sustainable way of life.

This livelihood framework mapping was a learning process for the farmers, those supporting the farmers, and the facilitators. The process also generated facilitation guidelines and facilitators from VECO partners and VECO itself who will be able to facilitate similar workshops in the future.

Therefore, it is recommended that this baseline study can be used to develop a joined programme between LSKBB and VECO in support of organic rice farmers in the Boyolali district.

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2. Chain Analysis Organice rice producers in Boyolali District (Central Java) By Ambarwati - VECO Alfons Urlings - VECO

29

2.1

Chain Map Chain logic & Power relations

2.1.1 Drawing of a Chain (relation) Map showing links between chain actors, BDS, environment ... showing the value of the product after each chain link

Tani Agung 5.800

(private sector) Transporting, cleaning, grading, packaging, quality control 6.000

Super market (Goro,

High level Alfamart, Carefour) Labeling, re-packaging, consumer storing, selling 6.500

PT SBO (private sector) Transporting, cleaning, grading, Un-hulled packaging, 5.800 rice labeling, QC

Producer Group

Distributor Transporting, laboratory test costs, distribute/ marketing

Fast Food Restaurant Organised consumer

6.100

Rice mill Milling the rice

2.1.2 Description of the power relations between the chain actors within the chain (who has the power to act and who has the power to define the actions of others) In this organic rice chain, farmers set up the basic price at producer level based on expected profit analysis. Through their group and technical assistance from BDS (LSKBB and/or Tani Agung/PT SBO) they also conduct production control at field level.

Private actors (Tani Agung and PT SBO) provide cash credit for organic rice producer groups. Producer groups who get credit from these actors have to sell an agreed amount of product to them.

Supermarkets and distributors are actors who deliver information in regard with consumer preference. They define (indirectly) the quality or requirements that producer have to fulfilled.

2.1.3 Value of product after each link ($), distribution of benefits of each actor (%, based on profitability of each link) Value of product after each link: - Producer group: un-hulled rice Rp. 2.100,-/kg - Milling rice cost: Rp. 100,-/kg rice - Producer group (hulled rice, drying, cleaning, packaging) Ă&#x2020; organised consumer: Rp. 6.100,-/kg 30

-

Producer group (hulled rice, drying, packaging) Æ Tani Agung/PT SBO: Rp. 5.800,Tani Agung Æ Super Market: Rp. 6.000,-/kg Super market Æ cobsumer: Rp. 6.500,-/kg

2.1.4 Risk assessment for each link • Farmer (group): low production; high input cost; no information about price fluctuation; discontinuing supply (excess or insufficient stock); insufficient sunlight for drying; not in appliance with consumer requirements.

• Rice mill: technical machine problems.

• Collector at village level: high competition with similar actors; cash money to buy rice from producer groups.

• Big trader: processing cost (grading, packaging, distribution); discontinuing supply from producer groups; no direct cash for delivery payment system • Consumer: low quality of rice; high price.

2.2

Enabling environment

2.2.1 Description of the environment in which the chain is immersed (rules, regulations, laws, standards, norms, institutions…) (This part corresponds well with the part ‘Policies, Structures and Processes’ in LHA 1. Market trends and issues affecting production and marketing of the product The issue affecting production is that national government policy promotes the use of hybrid seed, while local governments are working closely with NGOs to develop organic rice. Consumers and markets for organic rice are being established with rising consumer awareness of the risks of chemical residues in conventional rice.

2. Business and policy climate (receptiveness of private groups and conduciveness of public policies for participating and engaging in chain activities, Ease of entry and exit in the commodity chain, presence of service providers, etc).

The private businesses that want to get involved in the chain are those that are close in the chain to producer groups. Those that are at a more distant point in the chain (city traders) are not really interested in participating in chain activities because they do not have direct/close relations with the producers, so they do not care about them.

3. Institutional support (presence of other support groups or organizations working for better commodity performance) A great deal of institutional support comes from organised consumer groups, such as the family welfare movement, higher education institutes, and expatriate associations. They are willing to buy direct from producers at a lower price than they would pay in a kiosk, but which gives the producers a better margin. The advantage for consumers is that they get good quality rice (not mixed with other varieties or with chemicals/bleach).

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2.3

Business Development Services

2.3.1 Which BDS are actually provided to the different chain actors and by who/which (type of) organizations?

• • • •

Working capital soft-loan for farmer groups on production level (seed, organic fertilizer/ pesticide) by PT SBO (private actor) Grant/fund for farmer group on collective marketing activity provided by Government Credit for farmer group provided by BPR Cita Dewi (Finance Institution) Technical assistance, networking and chain analysis provided by LSKBB (local NGO)

2.3.2 What is the quality of the services?

The services provided by BDS are very useful for farmer. Those are exactly what farmer need.

2.4

Bottlenecks barriers & leverages

2.4.1 Which elements (Elements related to the farmer groups/organizations (quality, quantity…), related to the other chain actors, BDS, enabling environment and to the relations between the chain actors and non-chain actors) are bottlenecks and hamper further development of the chain?

• Producer groups lack the capacity to access market directly • Local middlemen do not differentiate between organic and non organic rice in term of price • No official coordination of the rice chain at district level • Insufficient supply due to increase in demand • No structured consumer education, so consumer assess quality by appearance only (full, white, clean rice) • No designated government agency to control rice price • National government promotes the use of hybrid seed • The private sector at a more distant point in the chain are not really interested in participating in chain activities • In some place: same rice-mill to process organic and non organic rice • Producer has no information about price fluctuations

2.4.2 Which barriers does the chain present for participation/inclusion of organized family farmers?

• Producer groups lack the capacity to access market directly

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2.4.3 Which are the necessary elements that have to be present to upgrade the chain?

• • • •

Consumer awareness/behaviour education ICS Further processing of small broken rice Packaging diversification to target different groups of consumers (segmentation)

2.4.4 Which elements or opportunities can be leverages for pro-poor farmer inclusion and for giving a boost to SACD • Supported fund /grant from government to be used for collective marketing activity • Credit for livestock procurement • Technical training to produce and process organic rice

2.5

Production related issues

2.5.1 Number of ha of the chain crop (and % of main crop occupation when intercropped) 7,247 Ha

2.5.2 Production system: chemical, low-external input, organic, standards, norms applied, certification…

“Organic” production system (not organic product) – no certification and standard 2.5.3 Production costs: - Hired labour – Inputs - Transaction costs Average from dry & wetland: Production cost: Rp. 4,827,000.- (per ha) - Labour cost: Rp. 3,147,000.- inputs cost: Rp. 1,680,000.-

2.5.4 Yield per ha (kg) Rice grain (dry un-hulled rice): Dry land: - Season I: 5,000 kg/Ha - Season II: 4,500 kg/Ha Wet land: - Season I: 8,500 kg/Ha - Season II: 7,500 kg/Ha - Season III: 6,500 kg/Ha

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2.5.5 Profitability (gross â&#x20AC;&#x201C; net profit) Profit: Rp. 43.500.000,-/ha/year

2.5.6 Sales volume Rice (hulled, average from dry & wetland): 9.700 tons per ha/year

2.5.7 Sales value 9.700 x 5.800 = Rp. 56.260.000,- per ha/year

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3. Results baseline study average income Organic rice producer in Boyolali District (Central Java) By Bernadeta Sutrisnowati- Consultant Steff Deprez - VECO

35

Commodity: Organic Rice District: Boyolali (Central Java)

3.1

Source data 1. Key informant: Lembaga Kemasyarakatan Bina BakatStudy (LSKBB) - partner VECO Indonesia 2. Local government: Dep. Of Agriculture, Plantation and Forestry (Dinas Pertanian, Perkebunan dan Kehutanan) 3. Farmers: individual interviews with a sample group of 25 organic rice farmers in Boyolali District and with organic rice farmers in Boyolali District during field visits

3.2

Results baseline average income GENERAL DATA: ORGANIC RICE IN BOYOLALI DISTRICT Total Boyolali district 101.501 ha Total farmland 22.876 ha Total farm land for 7247 ha organic rice Total organic rice 48.279 farmers farmers in Boyolali Lowland wet: 7.201 family farmers district Lowland dry: 20.981 family farmers Upland : 9.225 family farmers Forest: 10.872 family farmers

Source LSKBB LSKBB LSKBB Local Gov LSKBB Local Govt

Remark Farmers in low lands(wet/dry) have an average of 0,3-0,4 ha of farm land Farmers in the uplands and forest area have an average of less than 0.2 ha of farm land

Annual production organic rice

39.274 ton

LSKBB

GENERAL FARMING DATA: ORGANIC RICE Source Varieties of rice IR 64, Ciherang, Black rice (padi hitam), Interviews Menthik susu, Pandan wangi, Membramo, Red rice (Slegreng), Hibrida, Gogo merah Seasons organic rice Season 1 (Oct-Feb): wetland and dry land Season2 (Feb-May): wetland and dry land 36

Average ha/farmer % (average) income organic rice % (average) income other farming crops and livestock % (average) income non-farming activities

Season3 (Jun-Sep): wetland 0.40-0.45 ha/farmer 35%

Interviews Interviews

29%

Interviews

36%

Corn, livestock (cow, duck, ..) fish, groundnuts, vegetables, fruits (rambutan, mango, …)

Teacher, tractor renting, trader, carpenter, local government staff, mechanic, family sent money, …

COST OF ORGANIC RICE PRODUCTION & MARKETING Input production Rp. 1.510.000/ha (one season) costs/ha Paid labor costs/ha Rp. 3.147.000/ha (one season) Total own labor days/season (in man days) Marketing costs Total costs per ha

14 man days per season

Rp. 170.000/ha (one harvest) Rp. 4.827.000/ha (one season)

Interviews

Source LSKBB + interviews LSKBB + interviews Interview farmers Interviews

PRODUCTION OF ORGANIC RICE/HA Source WETLAND Production organic rice Season 1: 8500kg/ha LSKBB grain/ha Season2: 7500kg/ha (GKP) Season3: 6500kg/ha Production organic Season 1: 5100kg/ha LSKBB rice/ha Rendement (55Season2: 4500kg/ha 60%) Season3: 3900kg/ha DRYLAND Production organic rice Season 1: 5000kg/ha LSKBB grain/ha Season2: 4500kg/ha (GKP) Season3: Production organic Season 1: 3000kg/ha LSKBB rice/ha Season2: 2700kg/ha Rendement (55-60%) Season3: Production organic rice/ha (general) – mixed group of farmers wetland and dry land (interviews) season 1: 3800kg/ha and season2: 3200kg/ha confirms the data from key informant LSKBB

% SOLD vs OWN CONSUMPTION % (average) of 70-75% production sold

Source LSKBB & interviews 37

% (average) of production for own consumption + social activities

25-30%

LSKBB & interviews

AVERAGE PRICE/KG ORGANIC RICE Average price/kg organic From farmer group to traders: Rp. 5800/kg rice From farmer group directly to consumers: Rp.6000/Kg

Source LSKBB

Interviews Farmers get between Rp. 4000/kg to 6500/kg depending on the quality of rice AVERAGE INCOME ORGANIC RICE(calculated with the data above) Price/kg organic rice=Rp.5800/kg (as most Average gross income/ha Estimation based on the data sold through the farmer groups) collected Wetland (If % rice sold=100%) Season1: 5100kg/ha x Rp. 5800/kg = 29.580.000/ha Season2: 4500kg/ha x Rp. 5800/kg= 26.100.O00/ha Season3: 3900kg/ha x Rp. 5800/kg= 22.620.000/ha Dry land Season1: 3000kg/ha x Rp. 5800/kg= 17.400.000/ha Season2: 2700kg/ha x Rp. 5800/kg= 15.660.000/ha Season3: Average nett income/ha Estimation based on data collected % (If % rice sold=100%)

organic rice is

Rp. Rp. Rp.

Rp. Rp.

Average production costs = Rp. 4.827.000/ha (one season) (not including own labor costs) Wetland Season1: Rp. 24.753.000/ha Season2: Rp. 21.273.000/ha Season3: Rp. 17.793.000/ha Dry land Season1: Season2: Season3: -

Rp. 12.573.000/ha Rp. 10.833.000/ha

38